# What SHOULD the tobacco tax be?



## Brinson (Oct 28, 2007)

I am forced to wonder, in your opinion, what should the tobacco tax be? We all have different opinions, of course, but...I mean, all things are taxed, and, in your opinion what should the tax be?

A few options that occur to me:

Optimal Revenue point for each tobacco product: Basically, the point at which the government makes the most money. Would likely be higher for more inelastic products. If the government overtaxes, it taxes to a point where enough people stop smoking that they lose money even though they've upped the tax.

Over the optimal revenue point: Discourages smoking entirely, ie, the "sin tax".

No taxation.

Normal Sales Tax.

Under the normal sales tax.

Somewhere between the sales tax and the optimal revenue.

I'm not sure where I stand, to be honest. I've been thinking about it a bit, though.


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## Cigary (Oct 19, 2007)

Normal sales tax for the area you live. Sin Tax is a term the government uses to extort money by use of semantics. If something isn't good for you then it should be taxed at a point that merits the sinful nature of the act. What is the highest tax on these sinful activities? We're seeing it now and the reason it is so high is because we don't have the lobbyists that alcohol does. It's a double standard and this is something that you won't be seeing the last of. There will be newer "sin" taxes coming in the form of health costs or habits that tend to send you to the ER or doctor. Wait til you see the new healthcare program that is coming our way. Good health is going to be rewarded with decent enough premiums while those who have illnesses or diseases are going to have their healthcare premiums soar. This is a disgrace but your Congress is going to pass it by calling it by some fancy proactive name. Mark my words and remember this post,,,it's coming.


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## Magnate (Nov 27, 2009)

I actually would prefer someone to do the study required to find the pareto efficiency point... if I believed the study author, I'd probably be happy to pay that. 

With that said, I'm a fan of the current WA system: 75% of the retail cost with a cap of $0.50 per cigar. Then there's sales tax, which is like 9.3% in seattle - which would be high except that it's ok too because there's no income tax. 

I would even be ok with 75% up to $1 per cigar... 

WA has legislation on the table to bring it to 95% up to $2.42 per cigar. I have sent the letters to my representatives, but I am not convinced it will help. I will get my cigars elsewhere. I am of the mind that cigarette smokers would get hurt by higher taxes, but cigar smokers can go on vacation and come back with a few boxes of cigars to hold them over til the next vacation... 

Our awesome local B&M's are going to close. I won't be able to shop there. Take a $7 retail Cain Maduro, add $2.42 = $9.42 + sales tax @ 9.3% = $10.30 for a single Cain. If it was my only choice, I wouldn't stop smoking. But if I can get them for <$5 on the web...


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## Brinson (Oct 28, 2007)

From my understanding of pareto efficiency taxation would never be optimum because you always are causing someone to be worse off by redistributing the income. The inability to make anyone any worse off would simultaneously make taxing tobacco and removing the tax on tobacco impossible. It would also make legalizing and illgalizing tobacco in places where it is not illegal, or is, inefficient, because it only looks at what is, and decisions that can be made from the current moment.

Pareto efficiency is almost _impossible_ to use outside of models because you can't make anyone at all worse off. If a man is firing a gun on a street corner, even removing the gun from his hand peacefully and smiling at him would be inefficient, because you deprived him of his current happiness, gained from mass murder, which makes him worse off. And by the definition of pareto, you can only make decisions which do not make anyone at all worse off. In practice, the pareto model leads to inaction.

Kaldor-Hicks, however, would allow a very simple (though not easy) solution, as it allows financial compensation to counterweight the offsets. Go to a park, a nice one, and poll people. Ask them if they smoke, if they do, ask them, "How much would you pay to be able to smoke here?", if they do not, ask, them, "How much would be willing to accept to make smoking legal here?"

However, there is a huge response bias. That's why you go on a different day, and ask a different set of questions.

"How much would you need to be paid to agree not to smoke?"

"How much would you pay for smoking to be outlawed here?"

Average the cost, and you have a decent idea of the true value.

What's interesting about kaldor-hicks, though, is that it specificlaly mentions you don't have to pay. Whichever side has the higher number _should_ have their way because they offered more. However, that promotes lying, so best to make them pay...but also, kaldor hicks doesn't specify who should pay? The non-smokers could pay the smokers not to smoke.


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## Magnate (Nov 27, 2009)

Pareto efficiency models are often used in economic policy analysis. While I agree taxation does not allow for true pareto improvement, the proper taxation policy will do the least amount of harm to those being taxed while doing the most amount of good for the people receiving benefit from the taxation. Which looks very similar to pareto optimal in the end. 

Additionally, it could be argued that some taxation models do allow for a pareto improvements. If there are no roads, you can not do business. Taxing business allows roads to be built and maintained. Having roads built is an improvement. And while a business may be taxed for $1mm this year - it has also done $50mm worth of business because it had access to roads. Without the $1mm, there would be no roads and no $50mm for the same business paying $1mm in taxes. 

Kaldor - Hicks is great in theory, but even as you eluded to, it's nearly impossible to get accurate results and it's labor intensive and prohibitively expensive to put into practice. 

But hey isn't that what this thread is!? One question in what could be a giant Kaldor - Hicks model?! :tape:
:focus:


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## cubicdissection (Jan 10, 2010)

I don't believe there should be any special taxes on tobacco at all. Aside from some people opinion of it as a "sin", how are cigars any different from bottled water, skateboards, dish soap or rubber baby buggy bumpers? It's a consumer product, and should be taxed at the same rate as any other consumer product, no more or less. 

Damn near everyone does something that someone else doesn't like. Let the government levy taxes based on popularity, and it's a rare man indeed who doesn't end up paying the piper.


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## gibson_es (Jan 23, 2010)

i say normal tax, my milkyway is 7% and so should my camacho's


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## mrsmitty (Jan 22, 2009)

Regular sales tax. I tell you what they keep this crap up I'll be moving out of the Country.


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## Brinson (Oct 28, 2007)

cubicdissection said:


> I don't believe there should be any special taxes on tobacco at all. Aside from some people opinion of it as a "sin", how are cigars any different from bottled water, skateboards, dish soap or rubber baby buggy bumpers? It's a consumer product, and should be taxed at the same rate as any other consumer product, no more or less.
> 
> Damn near everyone does something that someone else doesn't like. Let the government levy taxes based on popularity, and it's a rare man indeed who doesn't end up paying the piper.


There is a free-market argument for ammentiy-taxes. At least, in theory, second hand smoke is real. Its prolly exaggerated to kingdom come, but its prolly real. If we could calculate the actual cost of medical bills of people who are affected, and a reasonable compensation cost for comfort lost, and then split it amongst tobacco retailers, it would actually be "free market" in the sense that it relies more on the defining of amenity property rights.

Just playing devil's advocate.

Essentially, when you do something that lessen another person's happiness, you cause them to be unhappy, and consume their utility at the cost of yours. Playing loud music at night, letting your weeds grow over the fence line, ect. This level of comfort can be seen as a good that you are _stealing_ from them by not paying for it.

That's the theory anyway. Feel free to disagree with it.


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## jaydub13 (Jan 13, 2010)

Brinson said:


> There is a free-market argument for ammentiy-taxes. At least, in theory, second hand smoke is real. Its prolly exaggerated to kingdom come, but its prolly real. If we could calculate the actual cost of medical bills of people who are affected, and a reasonable compensation cost for comfort lost, and then split it amongst tobacco retailers, it would actually be "free market" in the sense that it relies more on the defining of amenity property rights.
> 
> Just playing devil's advocate.
> 
> ...


YES, second hand smoke IS harmful to health. But noone really knows how bad. And if public health is the primary concern, where are the taxes on big macs and twinkies? Tobacco isn't the #1 killer in America, obesity is. THEREFORE, should we tax grease? I'm fairly certain that will never happen.

And if we are talking about public safety, what about alcohol? Nobody gets blitzed on Tatuaje Verocu's, gets behind the wheel, and kills innocent pedestrians. Shouldn't we tax Miller High Life then too?

Personally, I hate these "sin taxes" because they just aren't moral. The legislators can say whatever they want about the money going to pay for the costs of health care, but I say bullshit. We actually don't know where that money goes, but I'll bet that it isn't to that. They tax it because they are trying to kill it. What's next? Books that the government doesn't agree with? Gasoline so that we buy electric cars? Electric cars because the gov't gets so much revenue from petroleum companies? F this. Tax tobacco like you tax carrots, tickets to a concert, dog food, and post-it notes. Sales tax. Because regardless of what the product is, it is a good that is sold.

It's popular to hate on tobacco now, but let's remember, tea wasnt the only product that fell victim to taxation without representation.... the tobacco crops that were being grown here were taxed by the crown, and that had the founding fathers in an uproar as well. We are all too happy to be blissfully ignorant, but don't forget where you came from...


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## cubicdissection (Jan 10, 2010)

Brinson said:


> That's the theory anyway. Feel free to disagree with it.


I'm no economist, but I get the idea. Some interesting ramifications.

Following that logic, slow drivers should also be taxed. Problem is, it's harder for the government to identify such people...in fact it's nearly impossible. But they can identify a cigar, assume someone will at some point smoke it, and thus slap a tax on it. Should my annoying behavior be taxed while the slow driver is not, just because my habit is easier to detect?

The way I see it, if I don't want to be annoyed or inconvienenced, I'll stay at home. If I leave my house, hey, life's tough - get a helmet.


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## Mante (Dec 25, 2009)

cubicdissection said:


> I'm no economist, but I get the idea. Some interesting ramifications.
> 
> Following that logic, slow drivers should also be taxed. Problem is, it's harder for the government to identify such people...in fact it's nearly impossible. But they can identify a cigar, assume someone will at some point smoke it, and thus slap a tax on it. Should my annoying behavior be taxed while the slow driver is not, just because my habit is easier to detect?
> 
> The way I see it, if I don't want to be annoyed or inconvienenced, I'll stay at home. If I leave my house, hey, life's tough - get a helmet.


Oh I'm very much +1 on these comments. Do not try to protect me from my own folly! I am quite capable of making those decisions for myself thankyou. In Oz there was a Goods and Services tax introduced many years ago. It was supposed to replace all the other taxes. We still have about 6 different federal taxes & in this state another 8. Hmmm.


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## Magnate (Nov 27, 2009)

To the comment above about Miller High Life... um, alcohol does have special taxes... might want to look at that again. 

Also, remember, there are long term effects on tobacco smokers. And until one of you can prove to me that no one on Medicare (or utilizing other subsidized or uncompensated care) smokes or has ever smoked... maybe I can agree to not give it a special tax. Until then, even with no regard for 2nd hand smoke, smokers cause a debt to society. By smoking, making yourself less healthy, and making claims on medicare when you're 70 years old, you are using up a disproportionate amount of my tax money to pay for your care. I'm ok with you paying a FAIR amount more because of it. 

Look at Canada's taxation. I bought an MX2 in Vancouver BC for $22 (1 stick!). At first I was appalled. Then, I remembered that smokers in Canada can just go to the doctor and have their needs taken care of. So, paying a total of about 400% markup is the way Canada charges extra for people who are going to use their healthcare system more - and it's directly charged to the people who CHOOSE to make themselves less healthy. 

The more America clamors to have the government take over their healthcare costs, the more justified the government will be to tax or even ban smoking.


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## cubicdissection (Jan 10, 2010)

Magnate said:


> Also, remember, there are long term effects on tobacco smokers. And until one of you can prove to me that no one on Medicare (or utilizing other subsidized or uncompensated care) smokes or has ever smoked...


Yeah, I've heard this one before when I lived in California. The state won a settlement against the tobacco companies, ostensibly to pay for smokers healthcare costs. They took the billions, threw it in the general fund, blew it on pork spending. Tobacco company hikes up its prices to make up the difference. Who pays for the settlement? Bingo.

Also, fat people cause higher healthcare costs. Slow drivers frustrate other drivers, causing high blood pressure and higher healthcare costs. Fast drivers cause accidents, causing (you guessed it) increased healthcare costs. Damn near ANY behavior can be tied to healthcare when you think about it. Trying to "settle the score" down to the penny is not only impossible, it's an excuse for the government to tax you more and control your life. Mine too. How about we collectively man up and realize that someday we're gonna die; we may as well have a nice stick and enjoy life in the meantime.

EDIT: For the record, I'm self employed and pay every penny of my own helathcare costs, and I wouldn't have it any other way.


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## Cigary (Oct 19, 2007)

jaydub13 said:


> YES, second hand smoke IS harmful to health. But noone really knows how bad. And if public health is the primary concern, where are the taxes on big macs and twinkies? Tobacco isn't the #1 killer in America, obesity is. THEREFORE, should we tax grease? I'm fairly certain that will never happen.
> 
> And if we are talking about public safety, what about alcohol? Nobody gets blitzed on Tatuaje Verocu's, gets behind the wheel, and kills innocent pedestrians. Shouldn't we tax Miller High Life then too?
> 
> ...


I touched on the alcohol a bit but you took it and the other items into the same realm where I was going to go as well. Obesity is at an alarming rate and with it come diabetes that is spiraling out of control. So, why isn't the foods that bring this illness to the forefront taxed? Sugars are in everthing at such a "load" that it defies how people AREN'T going to develop diabetes in their lifetime.

Your last paragraph was and is very timely in that most of us are sitting on our hands while we are being taxed like our ancestors were who finally had enough and there was a revolt. I do not see that kind of revolt because of the complacency of the American public. What I do see is in another couple of generations this country will go down the same road as the Roman Empire. Research the story of how this Empire went down in flames, literally. I have to agree with Smitty,,,that unless things start to 'right' themselves soon I am going to liquidate all assets and move to a country where rights are still protected.


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## 1029henry (Jan 18, 2010)

This one's a no-brainer. Keep the Government away from my health care, and don't tax the "evil" products we consume simply because you can. This is America, one of the last bastions of freedom, and we are only holding on to these freedoms by our fingertips. There, that wasn't so hard now, was it?


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## nativetexan_1 (Jan 1, 2008)

The tobacco tax is an excise tax, a tax on items not necessary to living like tobacco, jewelry, yaghts, etc. I think ALL excise taxes should be the same, say 15% or so. We can argue about the rate of the tax, but government should not be involved in determing personal choices by taxing some choices out of existence.

Whatever happened to "freedom" and "pursuit of happiness"?


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## GunHand (Sep 20, 2009)

Zero Dollars...


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## nativetexan_1 (Jan 1, 2008)

Magnate said:


> To the comment above about Miller High Life... um, alcohol does have special taxes... might want to look at that again.
> 
> Also, remember, there are long term effects on tobacco smokers. And until one of you can prove to me that no one on Medicare (or utilizing other subsidized or uncompensated care) smokes or has ever smoked... maybe I can agree to not give it a special tax. Until then, even with no regard for 2nd hand smoke, smokers cause a debt to society. By smoking, making yourself less healthy, and making claims on medicare when you're 70 years old, you are using up a disproportionate amount of my tax money to pay for your care. I'm ok with you paying a FAIR amount more because of it.
> 
> ...


Don't I remember somebody in government stating/releasing a study that smokers SAVE tax dollars by dieing earlier than non-smokers? Something about the number of years Medicare has to keep them alive... Maybe we should encourage smoking if the truth is that we want to save money.


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## ejgarnut (Sep 28, 2009)

jaydub13 said:


> Personally, I hate these "sin taxes" because they just aren't moral. The legislators can say whatever they want about the money going to pay for the costs of health care, but I say bullshit. We actually don't know where that money goes, but I'll bet that it isn't to that.


+1 there. it is supposed to go for schip (childrens health) but there is also provisions in the schip bill that allow the gov to use the money for other purposes. i agree with you that it isnt going on health care.



Magnate said:


> Look at Canada's taxation. I bought an MX2 in Vancouver BC for $22 (1 stick!). At first I was appalled. Then, I remembered that smokers in Canada can just go to the doctor and have their needs taken care of. So, paying a total of about 400% markup is the way Canada charges extra for people who are going to use their healthcare system more - and it's directly charged to the people who CHOOSE to make themselves less healthy.


just taking northern Saskatchewan as an example, you should take a look at the number of emergency room cases of alcohol related entries as compared to smoking related. if tax was representative, then hairspray, cough syrup etc would be taxed at a much higher rate than any tobacco products.



nativetexan_1 said:


> The tobacco tax is an excise tax, a tax on items not necessary to living like tobacco, jewelry, yaghts, etc. I think ALL excise taxes should be the same, say 15% or so. We can argue about the rate of the tax, but government should not be involved in determing personal choices by taxing some choices out of existence.
> 
> Whatever happened to "freedom" and "pursuit of happiness"?


amen. its all about controlling the way you live.

lots of excellent posts on tis thread.


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## sconniecigar (Jan 1, 2010)

This is a very interesting debate. The standard sales tax seems appropriate to me.

I see some comments about not trying to control the citizens' actions by taxing things the government doesn't want you to do.

But how does everyone feel about the flip-side: tax deductions/credits to encourage us to do things. For instance, interest paid on mortgages and student loans are deductible. You get a deduction (or credit?) when you have kids. Donations are deductible. 

If we don't want taxes to control our actions, shouldn't we get rid of rules that both encourage and discourage us from doing things?


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## Cigary (Oct 19, 2007)

sconniecigar said:


> This is a very interesting debate. The standard sales tax seems appropriate to me.
> 
> I see some comments about not trying to control the citizens' actions by taxing things the government doesn't want you to do.
> 
> ...


One of the reasons for the Flat Tax argument. You only pay taxes on those items you purchase. If you can afford it you pay a flat tax. I'd even do a flat tax on my home,,example: I buy my house for $300,000 and the flat tax is 15%,,,,that is $45,000 which is a damn site cheaper than paying 30 years of interest on it. Think of it, how much more money would there be leftover to put back into the econony if we adopted the flat tax? No more IRS,,,how much does that save? Same with healthcare as most plans charge you 20% even though you might be covered there is still your deductible ad misc. charges and then they nail you with those secret charges that aren't "covered" under your plan hence the 20% charge.

Not to entice a debate over politics but rather make things as simple as we can so that everybody pays their fair share on everything,,goods and services and not making things so difficult where you need a doctorate in economics to do your taxes every year.


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## Magnate (Nov 27, 2009)

1029henry said:


> This one's a no-brainer. Keep the Government away from my health care, and don't tax the "evil" products we consume simply because you can. This is America, one of the last bastions of freedom, and we are only holding on to these freedoms by our fingertips. There, that wasn't so hard now, was it?


I SO agree that this is the answer... but then we have to cut the healthcare program most of our parents, grandparents, and some of us are on... and none of us want to do that... but I DO think you're right.



nativetexan_1 said:


> Don't I remember somebody in government stating/releasing a study that smokers SAVE tax dollars by dieing earlier than non-smokers? Something about the number of years Medicare has to keep them alive... Maybe we should encourage smoking if the truth is that we want to save money.


http://www.medscape.com/viewarticle/571715_3

There's the research... and it is true that people die sooner and often after spending less money in their lifetime. Perhaps that single piece of research says that tobacco taxes are backwards and we should be handing out cigars to children? If we can just get people to die sooner, it will cost less to keep people alive - hmmm, sounds like reasonable math to me. Would prefer our legislators to not see the logic in that, though.

Note that piece of research also negates all of the anti-obesity talk above too... McDonald's and Macanudo's for all!



Cigary said:


> So, why isn't the foods that bring this illness to the forefront taxed?


They aren't being taxed because they are being made illegal. 
Health Board Approves Trans Fat Ban - Health News Story - KIRO Seattle

EDIT: Actually, they are being taxed too! When I go to the grocery store, I can get a nice steak and some vegetables and there's no tax on it. If i grab a bottle of coca-cola to go with it, I get taxed. Let me grab a piece of chocolate for desert - taxed again.



Cigary said:


> I have to agree with Smitty,,,that unless things start to 'right' themselves soon I am going to liquidate all assets and move to a country where rights are still protected.


What country is that? (honest question, not sure what country you're talking about.)


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## ejgarnut (Sep 28, 2009)

sconniecigar said:


> But how does everyone feel about the flip-side: tax deductions/credits to encourage us to do things. For instance, interest paid on mortgages and student loans are deductible. You get a deduction (or credit?) when you have kids. Donations are deductible.
> 
> If we don't want taxes to control our actions, shouldn't we get rid of rules that both encourage and discourage us from doing things?


I know you are just playing d.a. here, but how many people do you know that are forced to take deductions for loans, mortgages or kids? How many are fined or thrown in jail for not taking these deductions?

Now compare that with the threat of fine and/or jail time if you refuse to purchase health insurance under the proposed healthcare legislation. To deny that the ongoing war against tobacco products plays a large part in the effort to force us all into a homogenous single payer government healthcare behemoth would be to ignore the obvious.

As others have mentioned in this thread, there are other products/lifestyles that are just as vulnerable to government intrusion as is tobacco, and once the government has milked this cash cow dry, you can bet your ass they will be coming for all the other "un-necessary" things we enjoy in life.

This doesnt answer your question, but i am truly disgusted with how out of control our governments have become, all the way from local on up to DC.


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## Brinson (Oct 28, 2007)

Cigary said:


> One of the reasons for the Flat Tax argument. You only pay taxes on those items you purchase. If you can afford it you pay a flat tax. I'd even do a flat tax on my home,,example: I buy my house for $300,000 and the flat tax is 15%,,,,that is $45,000 which is a damn site cheaper than paying 30 years of interest on it. Think of it, how much more money would there be leftover to put back into the econony if we adopted the flat tax? No more IRS,,,how much does that save? Same with healthcare as most plans charge you 20% even though you might be covered there is still your deductible ad misc. charges and then they nail you with those secret charges that aren't "covered" under your plan hence the 20% charge.
> 
> Not to entice a debate over politics but rather make things as simple as we can so that everybody pays their fair share on everything,,goods and services and not making things so difficult where you need a doctorate in economics to do your taxes every year.


Flat taxes are nice in theory, but a flat sales tax provides an essential discount to savings, making people who make enough money to save better off than those who make the bare minimum to survive. The more someone saves, a l;ower percentage of their income they pay in taxes.

For instance, if person A makes $20,000 and spends $18,000, saving $2,000, they spent $2700 on tax, which is 13.5% of their income in tax.

Another person makes $200,000, and spends $160,000, saving $40,000, they spent $24,000 on tax, which is 12% of their income.

As an extreme example, lets look at someone who makes 500 million a year, living on 20 million of it, they pay $3 million in taxes, they pay only .6% of their income in taxes.

Essentially a flat tax ends up making the rich richer and poor poorer, with people who make little money finding it very hard to save. If the flat tax is too high, it cripples the poor, but if its too low, the government can't make any money. At the moment, we recieve the VAST majority of our money from the very rich. If we set a flat tax that the poor could pay reasonably, the rich would pay next to nothing. We would find it difficult to so much as maintain roads, and you would be saying no to any large program such wellfare, medicade, or the military.


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## cubicdissection (Jan 10, 2010)

Brinson said:


> Essentially a flat tax ends up making the rich richer and poor poorer, with people who make little money finding it very hard to save.


This is going to happen anyway, because (as Dave Ramsey says), rich people keep doing rich people stuff, and poor people keep doing poor people stuff.

The only thing the government can do about the rich getting richer and the poor getting poorer is drag the rich down to the level of the poor.

Poor people are always going to find it hard to save until they increase their income. What's important is that in this country, for the time being, you CAN increase your income through hard work, education, etc.

I'd rather live in a country with an ever widening income gap that provides a framework of opportunity than have plenty of company in my government enforced poverty.

Not to mention the fact that even with increasing disparity between the ends of the curve, the curve itself trends UP. A rising tide lifts all boats...our poor are wealthy compared to most of the world. Something seldom mentioned by fans of income redistribution.


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## Brinson (Oct 28, 2007)

Our poor are wealthy only in comparison to the undeveloped third world. Other developed countries have a much higher HDI than us and far less homelessness, and people living without the bare necessities. The US, being one of the richest countries in the world, is #13 on the list of the top HDI countries.

Since the 1980s, our GDP has almost doubled, yet, at the same time, we have more people living below poverty, and poverty is no a relative measure, it refers to people's income being atr our above what they consider survival level. It represents the bare minimum for purchasing food multiplied by three. 

So, the rising tide may or may not lift all boats. 

I also don't have think a progressive inecome tax, where the rich pay a little more than the poor, will create government enforced poverty. Actually, its impossible, because if you became poor, your income would drop, and you'd get to keep more of it.


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## cubicdissection (Jan 10, 2010)

Brinson said:


> where the rich pay a *little *more than the poor


Really? Do you really believe that? A _little _more?

I was going to give a thoughtful reply to your post, but I don't think there's any point. Let's just agree to disagree.


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## Cigary (Oct 19, 2007)

Brinson said:


> Flat taxes are nice in theory, but a flat sales tax provides an essential discount to savings, making people who make enough money to save better off than those who make the bare minimum to survive. The more someone saves, a l;ower percentage of their income they pay in taxes.
> 
> For instance, if person A makes $20,000 and spends $18,000, saving $2,000, they spent $2700 on tax, which is 13.5% of their income in tax.
> 
> ...


A Flat Tax is what it is,,,,regardless of what you want to buy or not buy we will all pay the same rate. If you earn $$$ you pay the tax on it regardless if you are rich or poor. There is no sliding scale here. ANY time you pay for goods and services or pay for anything,,,you pay the tax. Trust me, if this was implemented there would be more money coming in than they could spend. Take away the most bloated parts of governent like the IRS,,,take away all earmarks, take away the BS that is healthcare today and our economy would soar. The reason our gov't is broken is because our $$$ is being wasted on things that do not matter or because we are spending it on other countries where foreign aid is killing our economy.

Here is an easy recipe: 15% flat tax for everything.
Houses: 3% loans from mortgage companies for a 30 year loan. Trust me, 3% over 30 years nets the mortgage company a fairly nice profit.
Houses are to live in not to "flip" and try to make more money on them than is feasible. The reason the economy went to shit is partly because of people thinking that houses are like the game Monopoly and loans got out of control and everybody lived on the bubble. Tighten the controls on the market where people can afford to live in a house and not to make the ridiculous profits they were making flipping houses. Greed is why our economy is broken.

Theories are what they,,,we've tried everything but the flat tax and my question is ,,,,how's it workin so far? It's times to get serious about the greed in this country and start limiting things.

We could debate this ad nauseum but the reality is pure and simple,,,greed and the people in office who are bought and paid for by lobbyists who continue the spiral. When everybody starts paying equally then we'll see a real positive effect.

If you make $200,000 a year you pay the same rate as the guy who made $20,000. Obviously the guy who makes more can buy more because he can afford it. The guy who makes less can only afford what he can afford,,,and the middle class guy who is making $40K is going to have more money to put back into the economy than they are now. Isn't that how things work? More jobs, more people being able to spend money,,,more businesses staying afloat, more people with jobs, etc. I say try it this way for a few years and see what happens,,,it certainly is a much better prospect for what is happening now.


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## slyder (Mar 17, 2009)

I say there is no point it talking about it. Why waste our breath. My Nebraska government officials made it clear that they dont give a shit what us little people want in the replies I got from my letter about the pipe tobacco tax. I vote revolution.


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## phatmax (Mar 18, 2009)

Magnate said:


> I actually would prefer someone to do the study required to find the pareto efficiency point... if I believed the study author, I'd probably be happy to pay that.
> 
> With that said, I'm a fan of the current WA system: 75% of the retail cost with a cap of $0.50 per cigar. Then there's sales tax, which is like 9.3% in seattle - which would be high except that it's ok too because there's no income tax.
> 
> ...


You know Web sales are going to be gone very shortly. Or taxed to bring prices to the level of retail sales.

They CAN'T allow web sales to continue at current prices and be successful at CONTROLLING THE POPULATION'S BEHAVIOR.


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## phatmax (Mar 18, 2009)

sconniecigar said:


> This is a very interesting debate. The standard sales tax seems appropriate to me.
> 
> I see some comments about not trying to control the citizens' actions by taxing things the government doesn't want you to do.
> 
> ...


Yes.

The gimmies that come out of Washington also come from our pockets just to be given to others.

Personal responsibility should include PERSONAL finances....


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## Magnate (Nov 27, 2009)

phatmax said:


> You know Web sales are going to be gone very shortly. Or taxed to bring prices to the level of retail sales.
> 
> They CAN'T allow web sales to continue at current prices and be successful at CONTROLLING THE POPULATION'S BEHAVIOR.


You can order things from duty free areas of the world. And the amount of work it would take to find out if every package coming in is being taxed as tobacco is more work than it will bring in revenue.

I'm not suggesting that people break the law, I'm saying it will be done.

Not to mention, people get crack and heroin from somewhere, and it's tax free crack too!


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## MattN (Dec 19, 2009)

Magnate said:


> I SO agree that this is the answer... but then we have to cut the healthcare program most of our parents, grandparents, and some of us are on... and none of us want to do that... but I DO think you're right.
> 
> There's the research... and it is true that people die sooner and often after spending less money in their lifetime. Perhaps that single piece of research says that tobacco taxes are backwards and we should be handing out cigars to children? If we can just get people to die sooner, it will cost less to keep people alive - hmmm, sounds like reasonable math to me. Would prefer our legislators to not see the logic in that, though.
> 
> Note that piece of research also negates all of the anti-obesity talk above too... McDonald's and Macanudo's for all!


The point was that tobacco tax is pushed because it supposedly helps offset the high burden that smokers put on the system, which has been shown to not exist because "smokers" die sooner than other people that live a "healthy" lifestyle. (Research has also shown, by the, that pipe smokers actually live longer than non-smokers, but I digress...)



> They aren't being taxed because they are being made illegal.
> Health Board Approves Trans Fat Ban - Health News Story - KIRO Seattle
> 
> EDIT: Actually, they are being taxed too! When I go to the grocery store, I can get a nice steak and some vegetables and there's no tax on it. If i grab a bottle of coca-cola to go with it, I get taxed. Let me grab a piece of chocolate for desert - taxed again.


Yes, but what you're paying at that point is sales tax, which is what I'd argue is the fairest tax for tobacco. What you aren't paying is an additional tax because of the perceived health risks those products pose, and the perceived burden you are placing on the health care system because of the food you choose to buy (whether that perception actually holds up to research).

Matt


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## Rubix^3 (Nov 10, 2008)

I disagree with the premise of the question; that tobacco be singled out for special taxes. 
If the government actually used this tax revenue to further research and treatment of cancer, I might actually acquiesce.
Instead, they use the money for welfare/medicare expansion (SCHIP). Its a freakin' sham.


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## smelvis (Sep 7, 2009)

Rubix^3 said:


> I disagree with the premise of the question; that tobacco be singled out for special taxes.
> If the government actually used this tax revenue to further research and treatment of cancer, I might actually acquiesce.
> Instead, they use the money for welfare/medicare expansion (SCHIP). Its a freakin' sham.


Not liking politics I agree with this statement the most!!

So +1


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## slyder (Mar 17, 2009)

Id like to know (like in the state of Nebraska) what they plan on doing for money when they finally raise the tax so high on a pack of smokes that nobody can afford to smoke. That is what they are hoping for ....that 15,000 people will quit smoking because of the increase. But what then? Thats alot of tax revenue they are no longer getting. Sure nobody is smoking and everyone is "healthier" but now the state is broke (or broker).


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## MattN (Dec 19, 2009)

slyder said:


> Id like to know (like in the state of Nebraska) what they plan on doing for money when they finally raise the tax so high on a pack of smokes that nobody can afford to smoke. That is what they are hoping for ....that 15,000 people will quit smoking because of the increase. But what then? Thats alot of tax revenue they are no longer getting. Sure nobody is smoking and everyone is "healthier" but now the state is broke (or broker).


Legalize MJ and tax it?


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## wlay1980 (Aug 16, 2010)

in my humble opinion, it should simply balance the cost of import and export along with the state and federal "need" for funding. Moral taxation is a method of control over the masses and we can see how that worked out in Russia. Therefore, I would pay a state sales tax and even a small federal import tax say even up to a dollar in addition to the cigar cost. Know I would be willing to pay more because I enjoy it so much, but a reasonable tax is to be expected not this over inflated rubish that is happining in legislation at the moment (coming from a smoker presidents own mouth).


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## shuckins (Jun 24, 2009)

since everything either gives you pleasure or kills you,i think tobacco should be taxed the same amount as bread,coffee,eggs,or steak...


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## wlay1980 (Aug 16, 2010)

shuckins said:


> since everything either gives you pleasure or kills you,i think tobacco should be taxed the same amount as bread,coffee,eggs,or steak...


Totally agree, 
however, playing devils advocate with that idea then shouldn't air be taxed especially in LA. I mean the air down there has got to be just as bad for you as any cigarette smoke. Both cause cancer and will eventually will kill you. :lol:


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## Adoro Puros (May 30, 2010)

I vote ZERO, NADA, NOTHING.

The state is way too big as it is, their power over us is growing at an alarming rate. Anymore money going into their pockets means less liberty for us. So the cigar tax should be: 0


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## Siv (Jul 26, 2010)

Rubix^3 said:


> I disagree with the premise of the question; that tobacco be singled out for special taxes.
> If the government actually used this tax revenue to further research and treatment of cancer, I might actually acquiesce.
> Instead, they use the money for welfare/medicare expansion (SCHIP). Its a freakin' sham.


While that's all very nice, it's also like saying that the defense budget should only come from taxes on sales of guns and ammo.

Personally, I feel that tobacco is a luxury so the tax should be high. Then plough that money into things that are essential like education. If people are highly educated, they will have good jobs and make plenty of money and be able to afford expensive cigars and have their kids get a great education who in turn can afford to buy their parents expensive cigars. Win win!


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## Mante (Dec 25, 2009)

Siv said:


> While that's all very nice, it's also like saying that the defense budget should only come from taxes on sales of guns and ammo.
> 
> Personally, I feel that tobacco is a luxury so the tax should be high. Then plough that money into things that are essential like education. If people are highly educated, they will have good jobs and make plenty of money and be able to afford expensive cigars and have their kids get a great education who in turn can afford to buy their parents expensive cigars. Win win!


That premise is based on the idea that only well of members of society should be able to afford cigars, or at least leads to that end result. How high should it be then?


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## smelvis (Sep 7, 2009)

I call bullshit on luxury taxes period. 

I choose not to have any yet my taxed help to pay for those who do have kids.

I could call bull on a just about every tax, Federalizes should be road and defense. States, Counties, Cities, for education and everything else, churches for charity.

No deductions for housing, child care or nothing ,even it up a bit. I love the flat tax!!

So my answer is the tax on tobacco should be zero 

Just My opinion and I am not debating probably to political anyway.


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## vtxcigar (Nov 25, 2010)

smelvis said:


> . . . I could call bull on a just about every tax, Federalizes should be road and defense. States, Counties, Cities, for education and everything else, churches for charity.
> No deductions for housing, child care or nothing ,even it up a bit. I love the flat tax!!
> So my answer is the tax on tobacco should be zero


I for the most part agree with Dave, but a bigger concern of mine is that regardless of the tax, it is against the law for me to smoke my cigars anywhere indoors, or within 25' of a door or window except for my own home, in Washington State. The good news is that the law does specifically state that the law is not intended to prevent people from smoking as they walk down a sidewalk as a passerby, so at least we aren't relegated to the yellow line in the middle of the street yet . . .


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